The Supreme Cannabis Company, Inc. ("Supreme Cannabis") (TSX:
FIRE) (OTCQX: SPRWF) (FRA: 53S1) and Blissco Cannabis
Corp. (“Blissco”) (CSE: BLIS) (OTCQB: HSTRF) (FRA: GQ4B:GR)
are pleased to announce that they have entered into a definitive
arrangement agreement (the “Arrangement Agreement”) under which
Supreme Cannabis will acquire, by way of a court-approved plan of
arrangement under the Business Corporations Act (British Columbia)
(the “Arrangement”), all of the issued and outstanding common
shares of Blissco (the “Blissco Shares”) not already owned by
Supreme Cannabis. The Arrangement is an all-stock transaction with
a total value of approximately C$48 million.
“Supreme Cannabis is the best positioned company
in the cannabis space to help Blissco achieve its ambition of
delivering innovative, quality assured full-spectrum cannabis
products to the world,” said Damian Kettlewell, CEO of Blissco. “By
merging with Supreme Cannabis, Blissco shareholders will benefit
from the combined expertise of both companies in growing premium
cannabis brands, producing and procuring high-quality inputs,
commercializing new products, and ensuring regulatory compliance.
Blissco shareholders will also benefit from Supreme Cannabis’
enhanced trading liquidity on the TSX and greater access to capital
that will allow us to focus and accelerate Blissco’s premium
wellness business.”
“Blissco has built a distinct and authentic
premium wellness brand. Through our strategic partnership and prior
investment in the company, we developed a deep understanding of the
business and a high level of confidence in the senior management
team. This transaction will allow Blissco to focus its business
around the production and commercialization of cannabis oils and
topicals for the premium wellness consumer,” said Navdeep Dhaliwal,
CEO of Supreme Cannabis. “Blissco shares our vision, mission, and
values. Through this transaction, we will combine best-in-class
processes, commercialization, marketing and brand building
expertise, and skilled management, ensuring we continue to achieve
our vision to improve global well-being with cannabis.”
Transaction Highlights.
Share-based offer to enable upside
participation. Under the terms of the Arrangement
Agreement, Supreme Cannabis will acquire all of the issued and
outstanding Blissco Shares not already owned by Supreme Cannabis,
representing a total value of approximately $48 million. Each
Blissco Share will be exchanged for 0.24 of a common share of
Supreme Cannabis (the “Supreme Cannabis Shares”). Shareholders of
both companies will benefit from the combined companies’ expanded
product offerings, infrastructure and consumer reach. Through the
acquisition, Blissco will join Supreme Cannabis’ exclusive
portfolio of premium brands and operate as Supreme Cannabis’ health
and wellness business.
Expands Canada’s only premium-focused
brand portfolio.Blissco’s established premium wellness
brand provides a platform from which the combined company will
launch new products for this growing consumer segment. Through the
acquisition of Blissco, Supreme Cannabis cements its position as
Canada’s only premium cannabis company producing at scale.
Provides advanced extraction
capabilities.Based in Langley, BC, Blissco operates a
18,000 square foot production facility with advanced extraction
capabilities. Blissco has completed phase 1 of construction of its
state-of-the-art cannabis oil extraction lab. Blissco has been
producing cannabis oils since receiving its production license in
August 2018.
United and committed leadership
team.Upon closing the Arrangement, Blissco’s CEO, Damian
Kettlewell will continue to lead Blissco while benefiting from
Supreme Cannabis’ expertise, infrastructure and access to capital.
Mr. Kettlewell has committed to remaining employed at Supreme
Cannabis as well as retaining at least 75% of his shares for a
minimum of two years.
Board Approvals.The Arrangement
was unanimously approved by both companies’ boards of directors,
and by a special committee of independent directors of Blissco (the
“Special Committee”). Deloitte LLP (“Deloitte”) acted as an
independent financial advisor to the Special Committee and has
provided a verbal opinion to the Special Committee that, as of the
date of such opinion, and subject to the assumptions, limitations
and qualifications on which such opinion is based, the
consideration to be received by Blissco shareholders pursuant to
the Arrangement is fair, from a financial point of view, to such
shareholders, other than Supreme Cannabis. The board of directors
of Blissco unanimously recommends that Blissco shareholders vote in
favour of the resolution to approve the Arrangement.
Voting support agreements and conditions
to close.The Arrangement will require approval: (i) by 66
⅔% of the votes cast by Blissco shareholders represented in person
or by proxy at a special shareholders meeting (the “Meeting”)
called to consider the Arrangement, and (ii) by a majority of the
votes cast by Blissco shareholders represented in person or by
proxy at the Meeting, after excluding the votes cast by persons
whose votes are to be excluded pursuant to Multilateral Instrument
61-101 – Protection of Minority Security Holders. Closing of the
Arrangement is also subject to the approval of the Supreme Court of
British Columbia, the conditional approval of the TSX to listing
the Supreme Cannabis Shares to be issued in connection with the
Arrangement, receipt of required regulatory approvals, and other
customary conditions of closing.
Supreme Cannabis has secured irrevocable hard
lock-ups (the “Lock-Ups”) from shareholders of Blissco representing
approximately 52% of the outstanding Blissco shareholders,
including Damian Kettlewell, CEO of Blissco, to vote in favour of
the Arrangement, and also currently owns approximately 10% of the
outstanding Blissco Shares.
Other Information.
A description of the Arrangement Agreement will
be set forth in a management information circular (the “Circular”),
which will be filed with the Canadian securities regulators on the
System for Electronic Document Analysis and Retrieval (“SEDAR”) at
www.sedar.com, as well as in Blissco’s material change report to be
filed on SEDAR. A copy of the Arrangement Agreement will also
be filed by Blissco with the Canadian securities regulators and
will be available for viewing at www.sedar.com.
Norton Rose Fulbright Canada LLP acted as legal
counsel to Supreme Cannabis. Deloitte LLP acted as the
financial advisor to Blissco’s Special Committee, and provided a
fairness opinion to the Special Committee, while Alexander Holburn
Beaudin + Lang LLP acted as legal counsel to Blissco.
All dollars represented are in Canadian unless
otherwise noted.
About Blissco Cannabis Corp.
Blissco Cannabis Corp. (CSE: BLIS) (OTCQB: HSTRF) (FRA: GQ4B) is a
Canadian wellness cannabis brand based in British Columbia and a
multi-licensed processor, cultivator, and distributor of premium
cannabis. Blissco owns and operates an 18,000 square foot,
state-of-the-art extraction, processing and cultivation facility
located in Metro Vancouver, British Columbia. Blissco is supplying
premium cannabis and Reserve whole flower and dried flower
pre-rolls to the Canadian market with supply agreements in British
Columbia, Alberta, Saskatchewan, and New Brunswick. In support of
Blissco’s global distribution strategy, the company has initiated
its EU GMP certification process and has completed its first
inspection by German authorities. Learn more at Blissco.com.
About The Supreme Cannabis Company,
Inc.
The Supreme Cannabis Company, Inc. is a global
diversified portfolio of distinct cannabis companies, products and
brands. Since 2014, the Company has emerged as one of the world’s
fastest-growing, premium plant driven-lifestyle companies by
effectively deploying capital, with an emphasis on disciplined
growth and high-quality products.
Supreme Cannabis’ portfolio includes 7ACRES, its
wholly-owned subsidiary and multi-award-winning brand; Cambium
Plant Sciences, a plant genetics and cultivation IP company;
Medigrow Lesotho, a cannabis oil producer located in southern
Africa; and a brand partnership and licensing deal with Khalifa
Kush Enterprises Canada.
Supreme trades as FIRE on the Toronto Stock
Exchange (TSX: FIRE), SPRWF on the OTC Exchange in the United
States (OTCQX: SPRWF) and 53S1 on the Frankfurt Stock Exchange
(FRA: 53S1). Follow us on Instagram, Twitter, Facebook and
YouTube.
We simply grow better.
Forward-Looking
Information.
Certain statements made in this press release
may constitute forward-looking information under applicable
securities laws. These statements may relate to anticipated events
or results and include, but are not limited to: statements
regarding the expected benefits to result from the Arrangement; the
effect of the Arrangement on both companies going forward; the
timing for the mailing of the Circular and holding the Meeting; and
the satisfaction of closing conditions including, without
limitation (i) the required Blissco shareholder approval; (ii)
necessary court approval in connection with the Arrangement; (iii)
certain termination rights available to the parties under the
Arrangement Agreement; (iv) Supreme Cannabis obtaining the
necessary approvals from the TSX for listing the Supreme Shares to
be issued in connection with the Arrangement; and (v) receipt of
required regulatory approvals and other customary closing
conditions. Often, but not always, forward-looking statements
can be identified by the use of forward-looking terminology such as
"may", "will", "expect", "believe", "estimate", "plan", "could",
"should", "would", "outlook", "forecast", "anticipate", "foresee",
"continue" or the negative of these terms or variations of them or
similar terminology. Forward-looking statements are current as of
the date they are made and are based on applicable estimates and
assumptions made by management of Blissco and Supreme at the
relevant time in light of their experience and perception of
historical trends, current conditions and expected future
developments, as well as other factors that they believe are
appropriate and reasonable in the circumstances. However, neither
Blissco nor Supreme Cannabis undertakes to update any such
forward-looking information whether as a result of new information,
future events or otherwise, except as required under applicable
securities laws in Canada. There can be no assurance that such
estimates and assumptions will prove to be correct.
Many factors could cause actual results, level
of activity, performance or achievements or future events or
developments to differ materially from those expressed or implied
by the forward-looking statements, including, without limitation,
the risk that the Arrangement does not occur; negative effects from
the pendency of the Arrangement; the ability to realize expected
benefits from the Arrangement; the timing to consummate the
Arrangement; public opinion; and any other risk factors discussed
in any public filings of Supreme Cannabis and Blissco filed with
the Canadian securities regulators, including the "Risk Factors"
section of Supreme Cannabis’ Annual Information Form dated October
2, 2018 ("AIF"). A copy of the AIF and Supreme Cannabis’ other
publicly filed documents can be accessed under Supreme Cannabis’
profile on SEDAR at www.sedar.com. Supreme Cannabis and
Blissco caution that the foregoing list of risk factors and
uncertainties is not exhaustive and other factors could also
adversely affect their results. Readers are urged to consider the
risks, uncertainties and assumptions carefully in evaluating the
forward-looking information and are cautioned not to place undue
reliance on such information.
More Information.
The Supreme Cannabis Company, Inc.Scott
Davidson, Investor RelationsEmail: ir@supreme.caPhone:
1-416-466-6265supreme.ca
Blissco Cannabis Corp. Investor RelationsEmail:
investors@blissco.comPhone: 1-604-484-9119blissco.com